You're merely assuming the G-5's ship doesn't have Kairoseki lining them. Not only is that not an established fact, but there is no evidence to support it.
Law's powers were clearly active.
Teleporting his sword to himself[
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Switching Smoker and Tashigi back.[
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Not only that, but we've seen DF powers affecting Seastone, such as Mr. 3's powers unlocking Seastone cuffs. Not only that, but it's an established fact that Kairoseki releases the exact same energy as the sea. Law's power affected part of the sea G-5's ship was in, meaning if water couldn't negate his powers, neither can Seastone since it emits the same energy.
When has the manga ever hinted to the hardness of a substance playing an effect in Law's ability to cut it? Nothing suggests that diamond's strength/hardness offers any kind of resistance to Law's powers.
Kairoseki is equal in strength to diamond. You do realize you just said ¨Law cut Kairoseki with his normal swordplay, which just as hard as diamond, but Law can't cut diamond with his ability to cut anything because Mihawk couldn't cut diamond with his normal swordplay, despite having stronger swordplay than Law."
If Law cut Kairoseki with his normal swordplay, it means, not using his power, Law is a better swordsman than Mihawk, as Mihawk failed to cut a substance just as hard as Kairoseki with his normal swordplay.